Correlation Between NYSE Composite and KWG Resources
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and KWG Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and KWG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and KWG Resources, you can compare the effects of market volatilities on NYSE Composite and KWG Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of KWG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and KWG Resources.
Diversification Opportunities for NYSE Composite and KWG Resources
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and KWG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and KWG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWG Resources and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with KWG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWG Resources has no effect on the direction of NYSE Composite i.e., NYSE Composite and KWG Resources go up and down completely randomly.
Pair Corralation between NYSE Composite and KWG Resources
Assuming the 90 days trading horizon NYSE Composite is expected to generate 16.41 times less return on investment than KWG Resources. But when comparing it to its historical volatility, NYSE Composite is 28.49 times less risky than KWG Resources. It trades about 0.14 of its potential returns per unit of risk. KWG Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.80 in KWG Resources on August 29, 2024 and sell it today you would earn a total of 0.25 from holding KWG Resources or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
NYSE Composite vs. KWG Resources
Performance |
| Timeline |
NYSE Composite and KWG Resources Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
KWG Resources
Pair trading matchups for KWG Resources
Pair Trading with NYSE Composite and KWG Resources
The main advantage of trading using opposite NYSE Composite and KWG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, KWG Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KWG Resources will offset losses from the drop in KWG Resources' long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| KWG Resources vs. Metals X Limited | KWG Resources vs. Largo Resources | KWG Resources vs. Sigma Lithium Resources | KWG Resources vs. Horizon Minerals Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |